Stocks face correction after sharp rallies
Monday’s selling pressure and market correction were a reflection of profit booking efforts, according to analysts at brokerage firms
Stocks at both the Dhaka and Chattogram bourses faced a correction after a sharp rally over the previous 15 sessions.
Monday's selling pressure and market correction were a reflection of profit booking efforts, observed analysts at top brokerage firms including: Lanka Bangla Securities, EBL Securities, United Securities, and UCB Capital.
Traders at different brokerage houses said that, following a debate over the accuracy of the government provided GDP data, some investors came with sell orders after recent gains.
Meanwhile, almost all the market professionals believe that, after a more than 20 percent index hike in one-and-a-half-months, the correction was a healthy one.
The last 15 sessions prior to Monday's DSEX, the broad-based index at the Dhaka Stock Exchange, witnessed only one red session with a minor correction.
The index went up from below 4,100 points on July 23 to over 4,950 on Monday morning, and the daylong profit booking finally closed the session at 4,785–a 1.53 percent decline from the opening point.
The blue chip index, DS 30, fell 1.33 percent to close at 1,618, while the Shariah index, DSES, fell 1.2 percent.
Investors' spontaneous participation in trading further increased the day's turnover at the DSE to Tk1,408 crore; which was Tk1,351 on Sunday.
The market began to rise sharply from the beginning of July, following multiple policy efforts to arrest the market's extreme dip over a year.
This occurred due to increased money market liquidity, a reduced interest rate, less than the anticipated impact of the pandemic on the economy, and the stock market regulator's all out steps to increase investors' confidence.
On Monday, 118 scrips at the DSE gained, 228 declined and the price of 10 remained unchanged.
At the end of the session, all sectors–except for non-banking financial institutions, mutual funds, pharmaceuticals, and jute–lost market capitalisation.
Life insurance, banks, food, and general insurance led the correction table, by losing at least two percent of their respective market capitalisations.
At the Chittagong Stock Exchange (CSE), the broad-based index CSCX fell 1.5 percent and the Shariah index CSI by 1.7 percent.
Unlike the DSE, turnover at the port city bourse fell by 31 percent to 31.7 crore.
